Ingrid has been waiting for the show "Mamma Mia!" to come to town. When it finally does come, tickets cost $60. Ingrid's reservation price is $75. But when Ingrid tries to buy a ticket, they are sold out. Ingrid decides to try to buy a ticket from a scalper (a person who purchased extra tickets at the box office with the intent to resell them at a higher price). If Ingrid finds someone who is willing to sell her a ticket for $70, she should:
A. purchase the ticket even though doing reduce total economic surplus.
B. not purchase the ticket because it is overpriced.
C. not purchase the ticket because the cost to the scalper was only $60.
D. purchase the ticket because doing so will make her $5 better off.
Answer: D
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Which of the following would cause an increase in the supply of peanut butter?
A) a decrease in the price of grape jelly (assuming that peanut butter and grape jelly are complements) B) an increase in the price of peanut butter C) an increase in the number of firms that produce peanut butter D) an increase the price of a product that producers sell instead of peanut butter
In the long run, firms in a monopolistically competitive market
A) usually earn positive economic profits. B) always earn monopoly profits. C) usually earn economic losses. D) earn zero economic profits.